Baowu News

[ 2017-06-16 ]

On June 9th, Moody moves Baowu Group and Baosteel’s rating from Baa1 and negative prospect to Baa1 and stable prospect. This is the second rating company that raises rating for Baowu Group and Baosteel after Standard & Poor. Currently, Baowu Group and Baosteel maintain the highest rating among comprehensive steel companies globally.

This raise of rating is a demonstration of Baowu Group’ core competitiveness and leading position in the industry. In this year, Baowu Group captures the market turnaround opportunity and combines reconstruction and reduction in company size to increase efficiency and deepen reforms under a solid basis. The company’s efforts in advancing the hundred-day plan and rapid utilization of benefits in reconstruction produced a positive start in production and management. The year-on-year growth from January to May significantly increased and will become a solid basis for achieving the goals for this year. Also, as the largest iron and steel producing company, Baowu Group is exemplary in addressing domestic overproduction of iron and steel by complying to national strategy.

Moody states that this raise of ranking for Baowu Group is mainly due to its particular leading position in market, its advantages in large-scale production, and continuous improvement in financial position, especially its financial flexibility due to its copious financial reserves. As the leader of global steel industry, Baowu Group is expected to demonstrate advantages in large-scale production, and develop synergy by optimizing industrial capacity utilization and sharing sales channels to keep both the lead in market and high efficiency.

Baosteel had a significant sales record for the past year and the first quarter this year due to the efforts of all employees. Concurrently, Baosteel and Wuhan Iron and Steel’s merger had an impressive start, and this merger’s hundred-day plan is within the prescribed schedule. Moody states that Baosteel and Wuhan Iron and Steel’s merger will produce a synergy effect in reducing fuel costs, production capacity optimization and sales channels, and a further reduction of costs after Zhanjiang steel plants begins operation. After these improvements, Baowu Group is expected to have adequate free money flow and keep the leading market position and high efficiency.

Source:Baowu News Centre